South Korean exports, which showed a sign of rebound early this year, are dwindling once again due to the novel coronavirus from China. In the case that the outbreak becomes prolonged, it will be another tough year for South Korea’s exports.
According to the Korea Customs Service, exports from February 1 to 20 recorded 26.3 billion U.S. dollars, which is 12.4 percent higher than the same period last year. However, this is not attributed to export recovery. It is simply because there were three more working days this year than last year. Daily export volume considering this factor stands at 1.69 billion dollars, 9.3 percent lower than the previous year. Given that the daily export volume decrease rate had been 3.2 percent until February 10 this year, such a downward trend has accelerated.
There was a sense of expectation for export recovery until the new coronavirus spread widely. The daily average export volume rose in January this year for the first time in 14 months since December 2018. “Exports will start to show a sign of increase even on a monthly basis from February,” South Korean President Moon Jae-in said with confidence on Jan. 20.
However, South Korea’s exports to Greater China Region decreased drastically as Chinese companies have stopped operating due to the new coronavirus. In spite of the increase in working days, South Korea’s exports decreased 3.7 percent to China and 26.7 percent to Singapore from February 1 to 20 compared to the same period last year. It is expected that the situation in March and onwards will not be great either.
The supply chain, in which intermediary goods are imported from China and finished goods are exported back from South Korea to China, has been shaken. Imports from China dropped 18.9 percent in February year-over-year due to the suspended supply of auto parts.